Oudated Budget based on outdated economic theory

Posted 5th May 2016 by Clare O'Neil in Articles | 0 Comment

The big winners are at the top end of town.

This is a Budget aimed squarely at making life easier for the wealthiest Australians and large businesses, and the government is very proud of that.

The proposed tax cuts for these two groups are the centrepiece of this budget, and were the first thing the Treasurer talked about in the parliament. Income tax cuts will benefit just the top 20% of earners.

While a millionaire is expected to be $16,750 better off under this Budget, a mother on $87,000 with two children in high school will be $4,463 worse off.

The ghosts of the 2014 Budget remain.

This Budget is built on the foundation of unfair cuts and changes that Joe Hockey introduced in the 2014 Budget. Huge cuts to family tax benefits remain buried in the Budget.

Cuts to pathology that will likely make blood and other pathology tests more expensive, raising the pension age to 70, and many other ideas that were soundly rejected by Australians the first time around remain in place.

Education is the biggest loser.

The Budget locked in $29b in cuts to schools, and a 20 per cent reduction in funding to our higher education system which – no doubt – will see students paying more.  The government talks a big game on jobs and growth. But like much of what they do, their words don’t match their actions.

You can’t grow your economy without properly funding your education system, and you can’t sustain one of the best standards of living in the world without world-class schools and universities.

It’s a Budget based on an outdated economic theory.

Looking at the Budget as a whole, there is a clear, deeply conservative philosophy unpinning the economic approach. The government is banking on the idea that if it gives businesses and wealthy Australians more money, that money will eventually trickle down to other Australians.

It’ s an old economic theory that’s been thoroughly debunked.

And finally, it doesn’t pass the fairness test.

This Budget proposes significant changes to our tax system that mean the burden will be taken off high income earners and companies. That means someone else has to bear that burden. And that’s ordinary Australians.

It utterly fails the fairness test.

If you thought the government had learned from the last disastrous two and a half years, the 2016 Budget proved that wrong.

Now, let’s bring on the election.

This article first appeared in the Labor Herald on 5 May 2016.

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